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Pharmaceutical industry in Japan - statistics & facts

The pharmaceutical market in Japan has shown small growth rates in the past years. A complex regulatory and pricing process, as well as the regular price cuts, have made it difficult for pharmaceutical companies to introduce new innovative products. Another reason for the stagnant market is the promotion of generic drugs adopted by the government since 2007 in order to reduce healthcare expenditures in Japan. The volume share of generics has more than doubled during the last decade and is still on the rise.

Domestic pharmaceutical market

Along with the flourishing market for generic drugs, the projected transformation of the Japanese pharma industry will be driven by the increased use of biosimilars that are expected to be the fastest-growing sector in the future, with a variety of products currently under development. As many drug patents have begun to expire, Japanese companies are forced to adapt to a changing market environment. The Japanese pharma industry remains, however, one of the largest with a share of approximately seven percent of the world market. While the market in Japan is subjected to a transformation, it offers a variety of opportunities and potential for growth. The aging society and growing life expectancy have led to high demand for medical treatment and will be a key driver for future developments. Additionally, the Japanese government has been working on reducing long approval processes for new products faced by pharma companies, which will also have the positive effect of attracting foreign companies. Not only international companies seeking to invest in the Japanese market, but also growing pharmaceutical exports from Japan will help strengthen the pharma industry.

COVID-19 vaccination and medication

Due to the outbreak of the coronavirus disease (COVID-19) caused by the SARS-CoV-2 virus, pharmaceutical companies around the world attempted to produce drugs for the treatment or cure of the disease. The Japanese government mostly funded international collaborations rather than developing the vaccine domestically according to the supplementary budget plans after the outbreak. Nevertheless, five nationally developed vaccines are currently in clinical trials as of June 2022. Shionogi & Co., Ltd., the National Institute of Infectious Diseases (NIID), and UMN Pharma Inc., for example, have initiated trials for a recombinant protein-based vaccine since December 2020.
In February 2021, the Japanese government approved the first vaccine against COVID-19, the mRNA vaccine developed by Pfizer Inc. and BioNTech SE. Vaccinations then commenced in February mainly for health professionals and in April for citizens aged 65 and older. AstraZeneca pls’ viral vector vaccine and Moderna, Inc.’s mRNA vaccine were approved in May 2021. The administration of the Moderna vaccine started directly after approval in cooperation with Takeda Pharmaceutical Company Limited as the local distributor. The distribution of AstraZeneca’s vaccine began in August 2021, limited to people aged 40 years and older due to adverse reactions by older patients reported internationally. From 2022, the government replaced AstraZeneca’s vaccine with the recombinant protein-based vaccine Novavax, with Takeda as the local manufacturer and distributor. As of June 2022, around 60 percent of the population in Japan were vaccinated with a third dose.
In terms of medication to combat an ongoing COVID infection, the antiviral pill Molnupiravir by Merck & Co., Inc. and Ritonavir by Pfizer received fast-track approval from the health ministry in Japan in December 2021 and February 2022, respectively. Both medicines are supplied free to medical facilities and pharmacies by the government until the supply can be stabilized. Domestic manufacturers such as FUJIFILM Toyama Chemical Co., Ltd., Shionogi, and Kowa Company, Ltd. are currently in the process of trials of antiviral medicines, as of June 2022.


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